SAP Universal Journal - how can you maximise the benefit

12 October 2015

Mark Chalfen

Mark Chalfen

Former SAP S/4HANA Global Lead

One of the significant changes that comes from SAP Simple Finance, part of SAP S/4HANA, is the SAP Universal Journal. The SAP Universal Journal provides a simpler data model, removing a number of core tables when posting Financial accounting documents.

Whilst this simplified data model will provide significant database size reductions, most customers should not be looking at moving to SAP S/4HANA just because the overall database reduction and subsequent savings. This blog post will show you how to create a more compelling business case to move to SAP S/4HANA and make use of the SAP Universal Journal.

Core benefits of SAP Universal Journal

There are three core benefits that you should focus on realising after implementing the Universal Journal:

  1. Month-end tasks
  2. Report preparation
  3. Data reconciliation

Month-end tasks

SAP Universal Journal allows the Finance team to re-design the month-end process and break away from performing all of the tasks within a short window. With the alignment of financial data, time consuming tasks such as cost allocations and assessment cycles can be run during the month and are no longer required to be run on the first day of the previous month.

This will provide the most disruption within the Finance team as this requires analysis of the current month-end task list and insight into how the Universal Journal works to re-align some of the tasks. Spreading the effort of month-end close across the whole of the month will even the work load and enable Finance to be less re-active. Traditionally, management accounting analysis is performed a month after the event resulting in the Management team reacting to what occurred rather than trying to rectify it during the month.

Report preparation

Traditional non-SAP HANA reporting will be performed via Business Warehouse tools that involve moving data from ERP (system of record) to BW (system of reporting/ analysis). When creating detailed management accounting reports within SAP BW, there are various data sources and layers of data that need to be transformed to provide the data the end user requires.

The simplified data model within SAP Universal Journal provides a single source of data that has all of the required data in a single view which reduces the complexity in the report design and support of that. Historically if a job or process within SAP BW failed, the figures within the SAP BW reports would be wrong. This would lead to additional support work to track the offending item, and then the schedules would need to be re-run to ensure the values were correct.

All of these tasks will be removed by the simplified data model within the Universal Journal and it is worth noting that within SAP S/4HANA you have the ability to run most Financial Analysis reporting direct from SAP S/4HANA using SAP HANA Live.  Reverting back to the month end simplifications the predictive engine within SAP S/4HANA can be used  to report mid-month of Financial actuals to gain a closer insight into how the month will actual end and up-stream processes can be amended to ensure the Financial figures are achieved. An example of this could be to promote certain items in order to hit failing sales targets, or increase capacity at the factory for products that are selling better than planned.

Data reconciliation

Data reconciliations normally occur during the month end process and whilst time consuming they are normally performed to mitigate risk rather than add insight or challenge into the Financial performance of a Company.

Reconciling financial data with Management accounting data is a common task that verifies all of the transactions have been recorded correctly.  The reason for this check is due to the way SAP recorded the different types of data (various tables for Statutory and M8anagement Accounting). By removing all of the tables and creating a single table to hold all of the information, the requirement to reconcile is no longer required as the source for Statutory and Management reporting is the same. Further to this the need to wait for Month End to perform Inter-Company reconciliations is removed as this can be run real-time any time during the accounting period.

Summary

It is worth noting that when you move to SAP Simple Finance, you will need to migrate to the SAP Universal Journal. Whilst most of the steps within the process will be deemed to be technical, business involvement is critical to ensure a successful outcome. 

The team will need to focus on what data they currently record and report on and what they would need moving forward. Whilst engaging with the business users to make the technical steps of the migration to the Universal Journal a success, it is recommended that a parallel stream is working with the Finance team to re-design the month-end process and the reporting suite that supports the process. The re-design of the process is where the true benefit of the migration to the SAP Universal Journal will be realised and the Finance team will not be working round the clock during month end.

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About the author

Mark Chalfen

Former SAP S/4HANA Global Lead

Mark tells it straight - as an ex-boxer, what else would you expect?  Both his knowledge and experience of SAP products allow him to cut to the chase dispelling myths and hearsay.

As a result of working closely with various SAP Finance Product Management teams on product development, Mark understands these products inside out. This depth of understanding has led to him become a ‘thought leader’ in his field; after all, it is not often SAP consultants have helped shape and develop the very product they are selling.

Having such a strong relationship with SAP alongside being an SAP Mentor and Moderator means that Mark has an extensive network within SAP. For clients, this relationship proves to be a huge advantage and leads to configuration issues being resolved rapidly.

Mark has worked on short proof of concepts through to year-long multi-million pound global roll-outs. However, no matter how large or small the project, the true value Mark brings to his work is in the guidance he provides to senior stakeholders. In essence, he assists them to implement more effective processes and drive better behaviours within their finance teams.

Helping organisations transform their business with SAP S/4HANA is Mark’s current focus. The benefits of S/4HANA are numerous, including the simplification of tasks, embedded analytics and improved user engagement. Whilst the eventual move from SAP Business Suite into S/4HANA is inevitable, the journey to it is not always clear. Mark’s ability to understand an organisation’s needs coupled with his deep understanding of S/4HANA provides clarity and eases their transition.

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